Of the 4,410 CEOs surveyed in PwC’s recent Annual Global CEO Survey, 'Winning today’s race while running tomorrow’s', 75 percent believed that they will see declining growth in the year ahead. For corporate communications practitioners, this emphasizes the need for sustained and targeted stakeholder engagement to better manage uncertainty.
PwC’s report is an insightful exploration of the challenges facing CEOs over the next 10 years. Across nine different categories, the report considers everything from business, climate and geopolitical risk to internal culture and individual leadership. The recommendations in the report all rely heavily on communication to be effective.
This the second of three posts reviewing the recommendations in the report and their impact on communication. This post focuses on the second section - 'Today's tensions.'
1: How much is your mood today affecting your view of tomorrow?
CEOS are generally pessimistic about economic growth in the coming year, a stark reversal from the optimism that was prevalent as the COVID pandemic came under control. Geopolitical conflict and and the concomitant increases in energy costs, raw material prices, wages and inflation are the main factors.
PwC asks whether the the pessimism is an excessive reaction to cognitive biases and recommends an effort to bring independent views into leadership meetings and boardrooms to combat bias.
A solid stakeholder engagement strategy is key to supporting these types of initiative. Companies should be giving careful though to which stakeholders they engage with, at what level they want to engage and what the objectives of engagement are. Involving the right stakeholders in high-level discussion is a good way to solicit alternative viewpoints while building trust and confidence. These relationships need to be carefully planned and managed, though, to ensure the appropriate level of disclosure.
The AA1000 AccountAbility Stakeholder Engagement Standard provides a comprehensive and authoritative model of how to do this.
2. How do your resilience and your workforce strategies fit together?
While the majority of CEOs are taking actions to cut costs, according to the report, only 19 percent are freezing hires and 16 percent are actively reducing the size of the workforce. This is ascribed to the high levels of employee attrition during the pandemic and a wide expectation that employee churn will continue.
The report identifies retaining top talent as a priority for CEOs, advocating methods including flexibility, fair pay and providing fulfilling work among the key levers to create work environment conducive to employee loyalty.
Engaging employees through visible leadership, consistent reiteration of purpose and honest request for employee feedback are just a few of the tools that communicators can use to support this. Building and reinforcing a culture that inspires and rewards high performance has always been central to employee retention. As the battle for talent intensifies, companies will need to need to work harder on internal engagement to meet the expectations of employees, especially millennials and Gen Z.
3. As geopolitical risks rise, what new contingencies are you preparing for?
The increase in geopolitical conflict in 2022 has created something of a divide between countries. CEOs in Europe generally feel that their domestic economies will lag global growth while CEOs from outside Europe tend to feel that the opposite: that their home economics will outperform the global average. Cyber-security tops the list of concerns of CEOs facing geopolitical while supply chain management comes in a close second.
The report recommends ensuring that supply chains are resilient and responsive through scenario-panning and the incorporation of AI technologies to help companies identify and respond to issues.
In addition to crisis planning, which was highlighted in the first post, companies might also look at how they build and maintain relationships with key partners in the supply chain. Again stakeholder engagement comes to the fore for organizations that seek to reinforce mutually-beneficial partnerships with supply chain partners. Consistent dialogue and a common approach to problem solving will go a long way to building the reputation of companies as trusted, reliable and conscientious partners.
The final post in this series will look at the third section of the report, ‘A balanced agenda’, which asks:
How much time and money are you investing in the future?
How central are you to your company’s reinvention?
What kind of ecosystem are you building?
You thoughts and responses are welcome. Please comment below.